 Today's episode of The Bitcoin Show is brought to you by Mt. Gox, MTGOX, Bitcoin Purchase and Sell for Currency, and MemoryDealers.com, MemoryDealers.com, and BitcoinBonus.com, and Cablesaurus.com. Hello, everybody, and welcome to The Bitcoin Show. We have a special treat for you today. This is Thursday. And now, ever since last Thursday, we started a new thing called Bitcoin, well, we call it Thursday panel discussion. So we've got some key people in the Bitcoin community to join us for a really cool conversation. And if you have somebody that you'd like to see join our panel, be sure and send us an email to email at only1tv.com, or bitcoin.only1tv.com specifically for this show. But today joining me live, well, first of all, here in the studio is Yifu Guo, who is from bitcoinnavigator.com, and also from OnlyOneTV. We're getting ready to launch a Mandarin, Chinese Mandarin language Bitcoin show. That is correct. And Yifu is going to be the host. Yes. Welcome, Yifu. All right. Thanks for having me. Also via Skype, we have Stefan Thomas. Hey, guys. Probably everybody knows Stefan Thomas. We use coins.com. Is it .com? Yeah, .com. We use coins.com. You can use .com or .org. It both works fine. Neither way. He's got you covered. Okay. And bitcoinjs.org. Welcome, Stefan. All right. From Switzerland, right? Yeah. Yeah. Switzerland. And Gavin Andresen. Everybody knows him. Gavin Andresen is the number one tech lead for the Bitcoin project itself, bitcoin.org. People would recognize that. So welcome, Gavin. Hey, guys. Good to talk to you. Thanks for taking some time to join us and have this little conversation, because it's just fun. So what's new? What are you guys? I know Stefan came up with some bullet points of things that are happening right now in the world of bitcoin that are really interesting. Do you want to go through that and just see what's up with those things? Yeah. I mean, the first thing that I wanted to hear about wasn't something that I can talk very much about because I haven't been following it too closely, but I would like to hear Gavin talk about the new client that's coming out, the 0.4. I know that the second release candidate is out already, and I think the main release is coming up. So I'd love to hear about that. Cool. Sure. Well, the big thing through the 0.4 release is private key encryption in your wallet. So that's the big feature that Matt Corralo's been working on, and it's gone through a lot of revisions. Finally, we think it's nice and solid and ready to be released. So this is a feature where the private keys in your wallet that lets you spend your bitcoins are encrypted with a passphrase. And so unless you enter the passphrase, you can't send out those bitcoins. So that helps with wallet security. It doesn't solve the wallet security problem, but it kind of is a step along the path to getting really, really secure wallets. So you can actually, you can open the app, you can open your wallet, but you can't actually spend them until you enter the passcode. Is that right? That's right. Yeah, they stay encrypted until you go to send the bitcoins. And then you can actually, you can tell Bitcoin how long to keep them unencrypted. Oh, that's cool. And I actually, I forget how, I forget what that fault is, but you know, if you're doing a lot of transactions, you don't want to have to enter your passphrase over and over and over again. So you can tell Bitcoin, you know, keep it unlocked for the next hour. And then it will, keys get locked again. They're locked on disk, and they'll be kind of locked in memory. And assuming that you don't have any, you know, bad programs running on your computer, looking at what keystrokes you're, you're entering as you enter your passphrase, and that should be pretty safe. And you don't have to worry about, you know, somebody coming across an unencrypted version of your wallet that you backed up. Again, you know, when it's on disk and when it's backed up, the private keys will be encrypted. Boy, that has got to be the number one most requested feature. And I love the fact that you, you're saying you don't need to enter the passcode until, if and when you're ready to spend them. So you don't have to enter it constantly and have the chance of someone observing you entering it over your shoulder. Or every single time you enter it, it's another potential point of capture for some kind of a keyboard capture trojan, right? Exactly. Yeah. If you had to enter your passphrase every time you started a Bitcoin, you know, you'd be entering it a whole bunch and it'd be in, it'd both be inconvenient and it also be less safe. So. Yeah. And it wouldn't really actually, it's not even necessary. I guess you could have one just to prevent people from seeing your balance, but it's not as important. The most important thing is the spending ability, right? Right. Yep. Okay. Yeah. It doesn't solve the, it doesn't really solve the, you know, somebody will know my balance or somebody will, you know, be able to see all the transactions to me if they steal my wallet. They will still be able to see that. So I mean, you still want to protect your wallet and you want to back it up and all of those other things, but you know, this solves the kind of the most critical, the critical issue. Yeah. I can live with somebody knowing my balance as long as I can still keep it. As long as it's still there. Right. Yeah. When you go back to check it. So what about backup, is the official client going to ever include anything that's going to do backup for you automatically? I hope so. The next big release, the plan for the next big release is to switch the user interface toolkit that we're using. So switch from WX widgets, which nobody seems to like, to QT, which is a very popular, kind of the leading open source cross-platform toolkit. And John Smith has been doing a ton of fantastic work on the QT client. Actually just earlier today, I was downloading it and I was going to run it myself and review the code to get ready for pulling that in to replace WX. And I believe, I'm not sure, like I said, I've just pulled it in and I'm starting to review the code. But I believe that already has a backup wallet menu entry, but I could be wrong about that. John Smith. That'll be the big thing for the next release. I haven't heard of John Smith, is that his real name? I have no idea. You don't really know. I should say it. I am not John Smith. I am not Smith. I know, we know. You're Satoshi. You might hate when I say that, because all day long he's telling you, no, I'm not Satoshi. Stop asking me that. So that's really fascinating. I have a question. Sorry to interrupt, but is the DOS stuff that you're working on right now, is that going to be an 04? Is that also for later release? Is which stuff that I'm working on? The denial of service stuff that we've talked about? The denial of service stuff probably won't be an 04, just because we don't have time to really thoroughly test it and review it. And really, all of the denial of service, so we should probably back up and let the audience know. Sorry about that, my fault. Yesterday, I think, I submitted a pull request that just adds some kind of more, makes Bitcoin a little more bulletproof to somebody trying to break it from the outside, which is called denial of service, where you try to get Bitcoin to chip a bunch of CPU time or chip a bunch of disk space or whatever. Is that the unique transaction, right? You're talking about that commit? Say again? The unique transaction, right, to database. Is that the one? That fix, actually, that fix is in 04. That was a fix that broke one of the alternate blockchains. This is actually a different kind of more generic fix to try to be a little more proactive about if it looks like somebody's doing something weird, sending you information that you really don't expect or don't know how to deal with, then you drop their connection and you say, I don't want to talk to you, you're acting fishy kind of thing. It's also, somebody makes you do extra work, right, and you need some way to punish them for that. So they can just keep you busy all day sending you both data and you want to get rid of them if they do that. So that's kind of what that is about. How can you detect every possible scenario that could lead to that? I mean, it's got to be challenging. That is the trick. I mean, coming to other areas of security, there's this notion of blacklists and whitelists, and in general, blacklists don't work very well. Blacklist is where you try to anticipate every possible bad thing that somebody will do to you and you say, all of those things are banned, and that typically doesn't work very well. A whitelist where you say, these are all the good things that I know about and we're only going to allow those good things, typically works better. In my poll, basically I'm saying, if you start sending me bad stuff, I don't care really what the bad stuff is, then I'm just going to start to ignore you. Maybe a combination of both would work well. If you have a whitelist of things that are always good, then those are allowed. But if any of these, whatever, a dozen obvious red flag things happen, then maybe a combination of both. Yeah, that's essentially what we're doing. So it's just kind of part of the, like I said, at the Bitcoin conference. My primary goals are to keep Bitcoin stable and secure. And so new features are great, but they're really not what I've personally been concentrating on. So trying to really beef up security and trying to be more proactive about it instead of just always reacting to the latest threat, to actually try to anticipate whole ranges of threats is kind of what I've been working on recently. The glitzy fun added features for usability can always be done by others, too. The most important thing is the security and the scalability and safety of the thing, right? Yep. Cool. That's actually, if you want, I can say something about Bitcoin Jest that ties right into that point. Because over the last couple of days, I've talked to some developers who were approaching me about Bitcoin Jest from different perspectives. One was sort of a payment processor. One person, you might actually know him from his GUI that he's brought out, Eli Sklar. He's come out with this very beautiful Chrome app-based GUI for Bitcoin. And sort of the idea is that these GUIs could all use Bitcoin Jest instead of the JSON RPC API. And then people could use them without having to install Bitcoin first, right, sort of in the lightweight client mode. And what that would allow me to do, if one of these developers actually jumps in and takes over, for example, Webcoin or Bitcoin Jest GUI, I would focus purely on the server side. So I would only work on the Bitcoin, sort of the Node Bitcoin API server. And other people would be working on the GUI for it, right? And I think that's the way to go, because, as you say, you need somebody who can worry about security and all that stuff full-time. Right. Is the server side, is that open source as well? Or is that part of the Bitcoin Jest package? It's all part of it. Oh, that's great. That's great. So anybody can run this server side service? Right. So over the last couple of weeks, some people have sort of posted their experiences with trying to run it. And we're still ironing out sort of the bug reports they come back with. Somebody has just posted to the brand new Bitcoin Jest mailing list, a really nice guide on how to install it. So that's what I would point people towards. I'm going to post it on Bitcoin Jest on Twitter later. So if you're interested in that, definitely check out the mailing list. And then on there, you'll find sort of a guide on how to install Bitcoin Jest at the moment. And yes, you can run your own exit node. The guys at Truecoin are now running sort of a permanent one. That's at exit.truecoin.com. I've heard from some guys in Canada who want to run a permanent one. And I'm definitely looking for people who are interested in also running a permanent exit node. So what an exit node is basically sort of the bridge between these lightweight clients and the Bitcoin network, right, so the peer-to-peer network. And you need these bridges in order for the lightweight's clients to connect. And the more open bridges we can have, the better, because people can at some point use two bridges and sort of compare the results that they give them back. And then if the results don't match, they know something's up, right? So if you have multiple exit nodes, you can actually get away with not trusting these exit nodes as much because you can compare the results to each other. Okay. So let's see, anyone can... In the lightweight client, how is the exit node selected? Can you have more than one? Right now, right now on Webcoin, it's just sort of an option that you can change in the settings. I think in the future, most clients, it's up to the client developer basically what they do with it. So in the case of SafeBit, if they end up using BitcoinJS as the infrastructure, then they would have to select what is their default exit node or if it's multiple ones, what is their default policy in there? I could see something like if there are a lot of exit nodes that unsubpoints some kind of name system that... Like what Bitcoin uses, some kind of registry or something, where you can get a list of exit nodes or update your pre-installed list of exit nodes from time to time. So I could see something like that, but for now it's just a manual setting and your client will likely come pre-configured with some default exit node. And right now, is the BitcoinJS... You said it's a Chrome. Is it a Chrome add-on that I can get from my Chrome browser right now? No, right now it's not for end users. So right now I'm advertising sort of the infrastructure to people who want to build services. So if you're working on some kind of payment network or you want some kind of good client for your customers, for whatever Bitcoin business that you run, that's when you should sort of talk to me and I'll get you up to speed on what other people are working on, maybe put you in touch with them, and that sort of thing. So for end users, you know, keep... Stay tuned, I guess. So I think the first really good client that's going to come out is if SafeBit decides to use that as an infrastructure. So that's really what I'm most hopeful about. But there's other people also working who are really interested in it. So again, I can't really predict where it's going to go, but, you know, the server is really stable now. So I've been running it since the conference and it hasn't crashed. It hasn't had any problems. So, you know, the server is getting there to be really, really stable. So I think the clients are going to follow now. OK. So any lightweight client can use this back end, right? I mean, a mobile app or any... It doesn't have to be a browser-based. It could be any lightweight client. And as I said, you know, it's open source. So obviously we'd like you to stick to the standard, that sort of the same standard API so that you can use the exit nodes interchangeably. But if you want to change something, you know, you can do pull requests and we can maybe get it into the official client or you can just roll your own fork of it and run it any way you want. So what it is basically is an alternative to the original client for specifically real-time applications where you sort of need real-time data from the Bitcoin blockchain, right? And the exit node is just one example of that. And then you can connect lightweight clients to that. You could also use it on the server side to do your own hosted wallet service or on payments solution or something like that. Again, it's really just a replacement for Bitcoin for certain use cases. OK. Wow. So what's the status on Webcoin? I mean, we're really interested in hearing about it at a conference about when this new, like... Right. ...method of storing online wallets. Somebody just posted a bug report so that's not working on Android. We start with that. There needs to be a lot of restructuring in order to make it load faster. And also, we want to slowly get some people using it with very small amounts that we can get some feedback on box and so on. You have to understand that the original client has had, like, almost three years of basically testing in a very real-world setting. So it's really hard to actually catch up to that. And I think that's sort of the goal right now. And I can't really say when I would feel comfortable letting my mom use it because, again, you know, you have to iron out all the kinks. And we're aiming, I guess, a bit higher than some of the clients that are out there already. So... Is there, like, a test net installation somewhere that people could just, like, run test song or is it like a more... Because I remember, I remember before when you were... You can fire up your smartphone and you can go to webcoin.ch. So that's just webcoin and then .ch. Is this advertised in your... I don't think it's actually out. Like, you didn't release this, like, did you? Like, I don't... It's online. Yeah, you can use it on smartphones. But on PCs, it won't work right now because the conversion is broken. And again, it's a work in progress. So I wouldn't really recommend any, you know, non-technical people trying to use it right now. It's not there. But in the future, you know, we'll definitely come on again, you know, report on the status, how things are going. Again, I'm focusing right now on the server side. So if you're interested in taking over the GUI, if you're a JavaScript developer or just generally a web developer and you're interested in the project, definitely let me know. It's a full open source project. There's no special ties to anyone. So, you know, if you want to contribute code or you want to take it over, even just let me know. Cool. Take it over. So you can go to webcoin.ch if you're a technical person for testing only, and that's actually live and working. And it's not on the test net. It's on the actual Bitcoin network. Yeah, it's on the actual Bitcoin network. So you don't play with tiny fractions of your coins. So you don't play with tiny fractions of your coins. Don't do that. If you have any problems or you lose coins on it because of a bug or something, do contact me. But, you know, I can only help if the data is actually still there. So you use it at your own risk. So I can only say, you know, be careful. No money back guarantee for testers. Okay. And the real... And a quick thing before you take off on Bitcoin.js. I remember, like, before how, like, no.js 5.5 came out and it broke a lot of stuff. Like, how easy is it for you to deploy at the moment? Right. So the different components have different requirements right now. So Bitcoin peer-to-peer, sort of the main, sort of the thing that's a quasi-replacement for Bitcoin D. That's pretty easy to install at this point. You just run... You install Node, you install NPM, and then you install one library. And that's all described on the website. You install one library and then you install... You run one command for installing the software. And from there, you have a nice little command line utility. I'm going to make some videos probably over the next couple of weeks to explain how it works and sort of walk you through the installation procedure. If you want to try it out, check out the mailing list again. So somebody has posted a really nice article on how to do that. Yeah, that'll be perfect. So yeah, so there's a couple ways. As for the other components, most of those, you have to install them straight from GitHub. So, you know, that's definitely for advanced people only. So if you want to run your own exit node, you can go to GitHub. Again, you know, the guy who's written this article has included those. So that gives you a little bit of a guide. But yeah, that's definitely for advanced node.js developers only. Cool, cool. This is getting really, really interesting. But this is a good time. I got to take a break really quick and thank our sponsors because without them, we wouldn't be here. So we thank Mt. Gox. MTGOX, Mt. Gox. Everyone knows the number one Bitcoin exchange site. You can buy and sell Bitcoins for, I think it's like 16 currencies now, natively right within the site. And they're enormous. They're, you know, one of the longest institutions in Bitcoin and they're here to stay. They have something like 90% market share at this time. And we, they're consistently supporting the Bitcoin show in all of our languages as we launch them. And so we thank them. We're very grateful to Mt. Gox for continuing to sponsor the Bitcoin show. And memorydealers.com, memorydealers.com is a site that sells all sorts of networking and memory and all kinds of high-end networking hardware. And Roger Ver was here at the conference. Many of us met him and a really, really cool guy who's coincidentally, totally coincidentally, just lives like a few blocks away from Mt. Gox in Tokyo. It's just kind of bizarre, actually. They get together for lunch sometimes. In fact, you'll see that when we finally do release all of our video that we shot in Tokyo, you'll see really, really cool footage that we took there. But anyway, memorydealers.com. Roger Ver is a huge Bitcoin evangelist, if you don't know him. And so one of the things that he's doing now is launching a 10% rebate in Bitcoin. So for all of his customers, not just Bitcoin customers, but every customer of memorydealers.com, you make a purchase. It doesn't matter if you're in a corporate environment or whatever the deal is, you make a purchase through a Mastercard, Visa, Credit Card, Paypal or even a purchase order. And you will get 10% back in Bitcoin. So all you have to do is that the checkout put the code BTC2011 and you'll get 10% back in Bitcoin. So check out memorydealers.com and thank them for supporting us and bitcoinbonus.com, similar kind of deal for shopping anywhere else online, wherever you are on buy.com or pretty much every site online that you're gonna purchase something at, make sure you go to bitcoinbonus.com because I'll be surprised if it's not listed there. They have hundreds and hundreds of online merchants there. So the stuff that you're gonna buy anyway, just go to bitcoinbonus.com first, get the link, click it and then you will get a rebate in Bitcoin. So bitcoinbonus.com, we thank them for their support and cablesaurus.com, cablesaurus, it's C-A-B-L-E-S-A-U-R-U-S like dinosaurs I guess or something, cablesaurus.com is your source for cables and all sorts of peripherals, but they specialize in cables and mining rigs too, right? Yeah, just mining stuff in general, they have CPUs and I believe they have video cards. They have expanded since their initial launch. Oh okay, all sorts of things. All right, even more than I knew and they accept Bitcoin of course, they're Bitcoin merchants so we thank them for their support as well. All right, so back to the good stuff. This is all good stuff, but tell us more, tell us more. What else is well? Talking about, you know, maybe not good stuff, we did wanna talk about the price a little bit so I don't know what your guys thoughts on that. On which? On the price of Bitcoin right now. Oh, the price of Bitcoin. Oh, what do you think? Well, the price? I noticed that it went down. It went down, yes, I noticed that. I noticed that too. You know, did you notice that the user numbers were pretty much constant throughout though? Like the number of nodes? I didn't actually notice that, but that is interesting. So I thought it was kind of... I used to work in Silicon Valley for a publicly traded company and after working there for a couple of years I just stopped paying attention to stock prices. Yeah, yeah, that's a good word. There seemed to be no relationship between what's actually going on and the price. It seems like there's lots of speculation and fear and kind of irrational exuberance and maybe some rational exuberance sometimes, but you know, I don't know. That's been kind of my attitude towards the Bitcoin price is that it'll work itself out in the long run. I think we need a community committee to plan for the irrational exuberance because there has to be an algorithm that can predict this. You're going to have Sven Bernanke who might be jobless pretty soon. Are you serious? Oh, you mean how I see what you're saying. He's got experience with trying to, you know... manage complex systems and stuff. Well, that's going to submit his resume. Yeah, oh my gosh. True, true, true. I think he might find a job somewhere, but some friends might take him in. Yeah, it's just so unpredictable. I mean, people always try to pin it to some current event. Well, this media story must have had that effect and so on. I mean, if you look at the charts, the only real event that you can pin the decline to is the incredible rise. You know, so I think most bubbles is kind of weird. It's like most bubbles sort of grow slowly over many years. If you look at dot com, if you look at the housing growth, like this stuff that grows over a long, long period of time. And then in, like, in these crashes, like Black Friday and whatever it's called, you know, the price goes back down, right? With Bitcoin, it's kind of been the opposite. It's like this, on a few days it goes up to, you know, $30 and then there's like this steady decline over the next couple of months. So it's kind of an inverse bubble. And I think it might actually be an inverse bubble in a very sort of tangible sense. Like in a normal bubble, everybody thinks it's crap. And so everybody thinks it's great. And then suddenly they realize it's crap. With Bitcoin, everybody realized it's great. But now they're sort of like wondering, like how long is this gonna take to actually take off? What are the actual implications? Is it maybe not the right cryptocurrency? So like, sort of everybody was like at this party and now everybody's sort of wondering, I don't know. But what really, I liked about the right, or at least the steady, maybe rising user numbers is, you know, what that means is that it's money moving out of speculation and into actual usage of the currency, right? And that is so much more important. Like all the speculation, that's noise. Like that's not even interesting, but people using it is so much more important. And also what I noticed is that people understand it better. I don't know if you've noticed that, but people understand it better now. They're starting to, yeah. There's more people developing for it. There's more people talking about it, like in a sensible fashion. So I don't know, I think it's good signs all around. It's just that prices is adjusting back down to a level from a huge rise before. I mean, I remember when it was at $4 and everybody thought that was a gigantic rise. That's when this guy, Neil, you made his video, Don't Buy Bitcoins. That was when Bitcoins was at $4. You know? It was a tremendous bubble, yeah. We're still quite a bit higher than that. So I don't know, we're just gonna go with it. You know, the public's memory is about two and a half weeks. That's all. They don't remember anything more than two and a half weeks apparently, because the thing is, if you look at any investment, okay, I'm just saying, okay, nine months ago, it was five cents, now it's $5. That's a fact. It's a hundred times its value in nine months. That's just a fact. So, you know, but people only remember about two and a half weeks ago. You know, like, well, it was, you know, whatever. Or the last high, it was $30 and now it's $5. They don't remember the good days. Yeah, yeah. Essentially, but it's good if you look at like a logarithmic like historic chart on the Bitcoin, it's kind of like it's going up and then kind of plateaus off a little bit. It's like it's trying to find its price and then maybe it goes up again and then it plateaus off and then they're trying to find its price. Like overall, it's still increasing. As you know, you said it's over nine months, five cents, 50 cents to like $5. And I think overall, like it's still going well and obviously the most important thing as Stefan said is about user base. And the cool thing is like, I've been trying to strike up like Bitcoin conversation and just to anybody I talk to really that has like a random chit chat and more and more people are being aware of what it is even if they don't know how it works. Like it's definitely seeping from the virtual world into our physical world, which is like nice. And they'll be like, oh yeah, I heard about Bitcoins. And then you know, you get on with this conversation. It was not just some like thing that only exists online or people trade it for speculation currency. And that has been increasingly surprising factor to me when I talk to people in like just the people I meet on like, you know, the streets or whatever and whatever conversation comes up. And that's been really like rewarding. And be like, have you heard about Bitcoin? They're like, yeah, you know, and then it's just like, wow, really? It's really helpful when you're talking to somebody and they've already heard of it because then it leads right into the conversation. There's two, two very quick points I wanna make. One is when you're talking about the value of Bitcoin, the number, the really to me, the meaningful number is connect the dots. If you look at the historic value of Bitcoin and you take the lows, you take the absolute lows and connect those dots and make a line. It's still this logarithmic rise. It's very clear rise. So if you ignore all the peaks and let's just think of that as the static in between the stations and you just connect the dots of the lows, the lows, the lows, the lows. It's a very steady, very steady, predictable high. Think about the drop from 1.1, where it was at 1.1 dollars and then it had this slow decline down to about, I don't know, 75 cents or something like that, right? Maybe a bit lower, I don't remember, but it had this slow decline and that was right before sort of the main media hype started, right? The price went through the roof. But it was this, it reminds me of exactly what's going on now. There's this sort of slow decline slowly going down and now it's sort of waiting to reach a broader audience. You know what I mean? And I think what could happen is that some more user-friendly clients come out and then suddenly it reaches a whole group of people that just couldn't reach them. And that's kind of what I'm waiting for. And I think it's gonna just keep stagnating or tapering off slowly until we hit that point where somebody comes up with a more user-friendly solution and then we can bring in a whole group of people who weren't able to use it before. That's right, I see that. So are you buying or selling stuff? Well, I said, probably before, that it was gonna sell until it went back down to $4 and that was when it's, I think, at 12 or something. So I'm still waiting for that floor of about $4. Probably not. I don't think it will quite reach it. Maybe it'll break through, I don't know. If it breaks through $4, I don't think it'll stop until two or three or even one dollar. So I think it's going to go somewhere to above $4 and it's gonna rise again, but I can't give investment advice. So I'm holding right now, I would say. I have been selling, but I think I'm holding now and I'm just gonna wait and maybe buy when it goes a bit lower. Maybe this little bit of information will influence you. It's already public now, because I put it on my Google groups. I have a Google groups called Bitcoin People and I put it out there and then somebody posted a blog about it and already tweeted it all over, so it's all over. But I can't say who quite yet, but soon you'll find out. I got contacted the day before yesterday by a major restaurant chain that has hundreds and hundreds of locations all over the country. And he actually sent me an email and said and so inspired by your show that that is why we are going to be accepting Bitcoin. So he's so psyched about it and in fact he said by the end of this weekend, their IT people are talking with me and stuff and they're gonna actually be installing Bitcoin, some sort of a point of sale method to accept Bitcoins in three of their restaurants as a test by the end of this weekend. And they're planning to roll it out, assuming everything goes okay, they're gonna roll it out to all of their locations. And they're very, very clear that this is a cutting edge and it will get much better. You know, in a number of months or maybe even weeks, they'll have a much better solutions available to them. But anyway, they're really excited about it. So this is huge. I know you've been contacted by Brian Cohn. He's one of the developers who was interested in BitcoinJS because he was working on a point of sale. So, you know, he's one of the people who might be supplying the technology for that for the restaurant, or maybe Andrew Shaw. So there's definitely people out there working on this stuff. So I'm sure they find a good solution. Definitely, I know them. And so yeah, if you have, if you're working on a Bitcoin point of sale system, let me know because I wanna be aware, well, first of all, I wanna be aware of everything that's going on anyway and possibly have you on the show and stuff. But also I can help field it for these guys. I don't wanna publish who it is quite at this very moment because they're gonna get a flood of 150 people. And since they contacted me, I wanna give them the honor of giving them my opinion first. And then after that, I mean, I'll have them on as a guest on the show. And I'm sure they'll be bombarded with people from then on selling them. But a lot of the point of sale systems are ideal for a small mom and pop shop. But it's a whole different ball game to have something that will scale to hundreds and hundreds to 500 retail locations. That's a whole nother game effectively. You know what I mean? It really has sort of has to integrate into what they're already doing or else it does not gonna make sense for on a grand scale like that. I think that kind of thing really is the key to the kind of Bitcoin's long-term value and success. And I would just, you know, listening to this conversation, it strikes me that maybe one statistic we should start keeping track of is the volume of Bitcoins going through the exchanges versus the volume of Bitcoins just being exchanged on the Bitcoin network. That should give us a sense for, you know, kind of how often people are turning around and going outside the Bitcoin economy. And that might be a really good statistic we should probably start keeping track of. But ideally, you'd like to see, you know, lots of Bitcoins sloshing around person to person. And, you know, every once in a while, maybe you have to buy something with dollars. So you have to go to an exchange. But, you know, ideally you want it all in the Bitcoin economy, right? Why did it take us that long to think of that, Gavin? No, I mean, I agree. There's a comparison, Charlie, Relatively out already. Like there was maybe 50 to 150 transactions per block and fluctuation-wise. And the current exchange is you're doing about like 20,000 Bitcoins a day. So, I mean, people- What's the difference? The difference between them is the commerce. Yeah. So effectively like an exchange is doing like 20,000 Bitcoins. And this is, I mean, because there's a lot of day trading related stuff. So you can't really use that as a, you know, granular measurement tool, but you could totally just look at the block and be like, how many transactions is in this block? And we're looking at maybe 50 to 150 per 10 minutes. And that's really like less than what we should be expecting. We should do that. We should have like Bitcoin charts or something should prominently have a figure. Well, on Bitcoin Watch, there is the number of how many Bitcoins were transferred, I think in the last 24 hours. And I actually, it's kind of funny because I actually looked at that not too long ago when Paul Krugman wrote his piece on his blog about Bitcoin. And I wanted to respond in the comments because one of the things he said was that people are just hoarding Bitcoins. And I thought it was ridiculous because Bitcoins are so easy to transfer. So it's actually like, even if you wanted to hold more Bitcoins, you could just, you know, spend the ones you have and just buy more. Like there's no rational reason why you would just hoard your Bitcoins and like not do anything with them. The price is a market price. For some reason you think they're worth more, just buy more. So, you know, I don't understand that argument at all. So in order to debunk it, I wanted to sort of compare the velocity of money of the US dollar with the velocity of money in Bitcoin. And that's really difficult to do because Bitcoin has, it actually transfers not just the money you send, but also the change, right? It sends a change back to yourself. So it's kind of really difficult to actually distinguish those two things. And so, but I've been thinking about that. So we really need some kind of institution or organizational group of people or something, some website where we can track some economic data for Bitcoin because, you know, the Federal Reserve has that. We need something like that as well. We need some way to something that supplies data, also for arguments, for talks, for all this kind of stuff. So definitely I'm with you 100%. Yeah, the idea of hoarding something. I mean, it's almost like saying, you know, people are receiving emails and hoarding them, you know, not sending them on. It's all about the utility. The more email transactions happen, it's because people are getting utility out of the function of email. The same for Bitcoin. The more transactions are happening, the more utility people are getting out of it. The more benefit and commerce is happening for whatever it is. So that is a great, great number we should be watching for sure is the amount of transactions minus what's happening on the exchanges. I mean, it's obviously some of that might actually be cash sales person to person, but a lot of it is commerce, actual commerce that's happening. And that is the utility of it. That is one of the, I mean, obviously investment is great, but the utility of using it is a great number to measure. Another thing I've come back to or looked at again was the Bitcoin stock exchange, right, GLBSE. And that's something like back then, I was sort of like, yeah, this is kind of a funny idea, but I don't think that's gonna be important for a while. But now, I think it's getting to the point where this should get some more prominence. And one of the things I'd like to see would be an index for that, right? Like a Bitcoin stock market index. And then we can start sort of seeing like over the entirety of all the stocks that are traded on there, sort of see how does that develop, how does Bitcoin economy develop? Because that's kind of such an important indicator for the classical economies, the stock market price, right? So why don't we have that? Why don't we have an index where we can see, okay, the Bitcoin price is going down, but how are Bitcoin companies doing? Are they making profits or are they making losses? So that's kind of an interesting thing. Obviously. I gotta be honest, the GLBSE scares the pants off of me. For no particularly good reason, it just, it makes me start to squirm with, I know how heavily regulated stock markets are. And it just, it scares me. It makes me think that maybe, it would bring more attention from potential regulators or even just, all the trust issues with, I'm sure there's gonna be a GLBSE company that raises a bunch of Bitcoins in stock and then just up and disappears. That's gotta happen, right? I mean, with all the other bad things that have happened, it seems like that's inevitable. So I don't know, I don't have any really, solid reasons to say it shouldn't be done. And I certainly can't control it. And maybe it will be a huge and wonderful success in free market stock exchanges. And I hope so. But I just gotta say, it scares me. What an experiment. Can it really get solved? I gotta agree that that's going to happen, that somebody's going to raise money through that stock exchange disappear. But I also think that there's now people in the Bitcoin community that you know, that people you've seen, people who've been either on this show or another public platform surrounding Bitcoin, maybe people you've met. And I think I'm getting at least to the point where there's some people in whose companies I would be willing to invest. Present company not excluded. So there's some people, and there's so many more too. And at the Bitcoin conference, you could meet so many people. So I think, yes, it's still risky and you should be aware of the risk, but all investment is. So I'm not saying you want to buy any random Bitcoin stock, just buy one where you really can't believe in it. Yeah, but I'm also worried about, the people who actually own the companies who I do know, who maybe aren't aware that they're violating securities laws or doing, I'm not nexing in any of that stuff. I just know enough about it to know that I'm upgrade. It couldn't be like having a sandbox filled with sugar at the park and a picnic because it's gonna attract the ants. I mean, if you have, it could be bait for regulators to come in, is that what you're saying, Gavin? That it could be just regulator bait, because especially if somebody does pull a scam like that, and that will be the justification of why it needs to be regulated. Right, yeah, I mean, that's a big part of my worry is yeah, it might attract unwanted attention. But I don't know if it could be worse than having a currency, like to me, like a currency is something that's far more regulated than even stock markets, but I'm actually wrong, I don't know, but I don't know if I can share that worry that's necessarily worse than what we already have to worry about. It's kind of like the e-wallets, that there's 20 new e-wallets springing up every week and there's nobody regulating them, they don't even have a contact tab. It's like, who are these people? Any 10-year-old can set up a bank now. Right now, that worries me too. Yeah, I mean, that's like craziness too. There's one of them I talked to for an hour and before I really wasn't getting it and finally he explained to me, no, no, no, we're a Bitcoin bank, but we don't have online banking. What? Oh, we'll email you an address that you send the Bitcoins to. I'm like, oh, you've got to be kidding. And they're literally calling themselves bank, the word bank in their name. And I'm like, you've got to be kidding me. It's nuts, but that's the thing. It's kind of the wild, wild west and anybody can set up a bank. Anybody can set up a stock exchange. Of course, you want to invest with people that you know and trust. And that's like, I guess, age-old wisdom, but boy, it really hits home when you're dealing with electronic cash, irreversible transactions and all that. So the idea of the stock exchange, oh, here's another thing, Stefan, is that obviously that might be a good indicator of how Bitcoin businesses, some Bitcoin businesses are doing, but of course, not all Bitcoin businesses are on that stock exchange. Probably most of them are not, right? So it'd be harder to measure the, there are probably very, some very successful Bitcoin businesses that are not going to be on that stock exchange, right? Yeah, okay, but that's true for all stock exchanges. For example, SIS Institute is one of the largest software companies, so while they make statistical software, I'm writing a case study for my study program right now. And they're not on a stock exchange either. So, you know, even with the NASDAQ or whatever, those are just sort of a random selection of the companies that are actually gone public. So that's true for any stock exchange. So that's not exclusive to this. True, true. It's a little bit, it's a small sampling of Bitcoin businesses and it might not even be a fair sampling because it's startups that have sought out funding by using that method. They may be less mainstream, I don't know. That's just a hunch. I don't know, like again, like it depends on where the stock exchange is going to evolve into. I mean, as long as we're talking about, you know, a few dollars, you know, I don't think regulation is something that really we need to worry about on the stock exchange side. It's going to, in the long run, it's going to depend on how big is it going to get. And the bigger it gets, the more it has to comply with, with more and more regulations. It also depends on where is it located, you know, because it's Bitcoin, it could be located anywhere. So again, I don't know if the operators of GLBSE are necessarily the right people to, to meet these challenges, but I think that a stock exchange for Bitcoin is both necessary and very, very interesting. Yeah. There could potentially be multiple stock exchanges, obviously. Right. For sure, yeah. Yeah, interesting, interesting. Okay. What else is on your list of topics that you came up with, Stefan? I don't know how to remember. I'll write the congressional hearing, but that's really more of a small mansion. I don't know if anybody's seen that. Yeah, I have the paper. Yeah. I mean, they also published like, whatever they were talking about, and it was like Lawrence, Al White, was it? Yeah, Lawrence White, yeah. Yeah, Lawrence White. He's an Austrian school economist. So I think just to give the backstory, so there was this congressional hearing in Ron Paul's committee. I don't remember what it's called, banking committee or something. And one of the witnesses he called was Dr. Lawrence Wright from George Mason University, and he argued against legal tender laws, and he wants, they're pushing a bill for, you know, liberal, how's it called in English? You know, a more liberal market for money, right? So that you can have competing currencies. One of the things that Nobel Prize winning economist, Friedrich von Hayek actually pushed, Friedrich A. Hayek pushed. And so this guy was arguing for it, and so he listed a whole bunch of different things that people might wanna tie their contracts to, or denominate their contracts in. Things like, you know, commodity baskets, and he had a really long list, and then when you got pretty much close to the end, he's only said Bitcoin. And it was kind of a weird moment because he said it so like normally, like this would be just something that you might wanna denominate your contracts in, you know, so I think that's interesting. And it's a nice mention, it's all I thought about it. Gold, gold, silver, gold, silver, gold, gold, Bitcoin. Whoa, where did that come from? Right, it was kind of. I mean that law is really heavily focused on precious metal-based currencies though, but I think if it gets passed, we'll see something interesting because it abolishes the side of what is legal tender and what is, can you print your own currency? Or like, remove that law, which would be nice. Yeah, interesting. Let's see how we know. Speaking of units of accounts, there's another interesting subject. I mean, with the Bitcoin price being fairly volatile, sometimes you might want a different unit of accounts. So I think a lot of stores are already sort of putting dollar prices and then, you know, accepting Bitcoins for them. Right. A lot of payment interfaces are sort of trying to isolate both the customers and the merchants from exchange rate risk in terms of Bitcoin. So, you know, that's a really interesting question because do you want to use the dollar as a unit of account? Because the dollar itself is not necessarily super stable anymore. So it's kind of interesting what could you use as a unit of account if Bitcoin goes up too much or is too volatile and the dollar goes down too much? So what can you actually use as a good way to price your products in the future? I think the economists likes to use the Big Mac. They have their Big Mac index. It's a price of Big Mac across the world, so maybe you could somehow tie a web service where you can pull that from. Is it true they have a $30 Big Mac in Tokyo or something? No, I was looking for, it's not that, actually it's not that crazy. I was in Tokyo recently, you know, and the prices are not... It's like six, seven dollars, they're calling it. Yeah, I mean, it's about the same as London. I mean, it's like, it's about the same as Manhattan, really. It's not that crazy expensive. I think that the yen actually has been stronger to the dollar. The yen has been really strong, so that's probably why. But yeah, to go back on the whole how people are spending and to do, to balancing between currency risk and putting prices in dollars for merchants, and to go back to the whole transparency of the network, like I think a lot of the spending, whether to be on exchange or commerce or things, aren't being seen because it's done through a third-party system as opposed to over the Bitcoin network. So like half the stuff are going to like, maybe like three addresses owned by like a merchant processor, you know, rather than people just sending Bitcoins across the network. And I think a lot of that, it's currently not being registered because we're still looking at maybe sub-200 transactions per block. And in reality, I think we're like, it's a lot more than that. And we're just not seeing it because it's being swallowed up by an exchange or by some kind of like merchant solution. And I think that it doesn't have to change, but I think as more people become more aware of, and as second generation technology come for these people who are less technical, they could still use the network. And I think that's the more of the key is to get merchants to actually physically use the Bitcoin network to do their commerce-related stuff as opposed to do it through a third-party solution, even though that's great and all. And of course, there'll be less fees because you're not doing it through a third-party, over a third-party, you know, because peer-to-peer, it's supposed to be like a low fee. And but if you were gonna do it through somebody else who was gonna talk to this large peer swarm and then they're taking, you know, whatever fee, and that's not really the intent of the Bitcoin system. Well, as long as they maintain compatibility, right? So as long as you can pay with them to for another process, right? As long as they do that, you maintain competition. As long as you maintain competition, you know, you maintain the advantages of Bitcoin. So I think it's one of the most difficult questions to answer, whether it's going to be third-party services or whether it's going to be sort of peer-to-peer type solutions. I think both is possible, and it's really hard to predict which is gonna be the one that we go with or people choose. But I think it's gonna be an improvement over what we have now in both cases because in both cases, there's more competition. One good point though, when you're talking about Gavin's number for measuring commerce, when you have, for example, somebody's using a Mt. Gox point of sale solution and the transactions coming from a Mt. Gox customer to a Mt. Gox customer is an instantaneous transfer and all that, that is not gonna be measured anywhere. It's like- Well, you need something like Bitcoin charts, right? So you need to go to Mt. Gox and you need to say, give us that data in an aggregate form, right? So that, you know, it's anonymized and you can't see who sends what to who. But you want sort of the totals and then you can create something like Bitcoin charts where all the data sort of presented in a nice form. Yeah, as long as everybody wants to play, well, you know, with each other, send that data. Well, why are they doing it on Bitcoin charts, right? Why are they putting out their volume, for example? Like they wouldn't have to do that. I think they are willing to do that as long as it's in an aggregate anonymous form because maybe they wanna know themselves how they stack up. Maybe, I don't know, like I actually don't understand why people are putting all that data on Bitcoin charts but it's definitely possible to get it. Maybe you pay for it even, I don't know. I think it's probably, I mean, my guess is that they don't wanna be the only one that's not there. It's about, you know, if you're in exchange and you're not there, you're like why am I not there? You know, it's like the standard of credibility and if all the data is there but your number is missing, they're going to you. Why is your number missing? Because the community wants to measure that and compare. Yeah, I mean, I get emails from wallet providers like there was an Iranian company, the Canadian company, like just writing to me, you know, we might be listed on we use coins and I think you could tie that to something like that. Why not? I mean, right now there's actually a pretty good question. Maybe I can get some insight into that. Like what should we list on we use coins in terms of wallet providers? Because I'm really, how is it called, a burnt child? Like somebody who doesn't, like I've really got burnt with featuring my Bitcoin, obviously. So I'm really hesitant to feature other wallet providers. What would you think about that? Yeah, exactly. I just, I don't even wanna feature any. I think you should wait until you're, yeah, I don't write. I mean, the best way is not to feature any but I think it's better to provide like alternative client that's based off like you're now JS or Bitcoin JS when it's more fully like oriented it's ready for testing. Cause that's more or less third party dependent than all the other stuff that needs to be done. So I think the whole thing is like minimal trust, right? Like we don't wanna trust anybody but even JavaScript, you know, encryption client side has its problems but even though they're much less than you're blindly giving somebody your money but there's still a risk and I think people have to understand that before blindly just going to your website and be like, oh, they recommended this thing and this website is nice. Let me use the, you know, that's essentially what has happened and we don't wanna do that. Yeah, if you link to 150 wallets, e-wallet sites, I mean, it's almost like this implicit recommendation and I won't do that anymore. Been there, done that, got burned. I'm not gonna do that anymore. So there's two questions is what, obviously the future clients that are coming that will secure your wallet and all that, obviously that's the best solution but that's not here today. So they need a solution today also. So there's two parts to that answer. Well, you have to have something on there today or nothing, say just don't do it, it's not ready or come up with something that you can recommend right now and that's tricky, you know, it's just really tricky. Yeah, it's a strategic move. What would you recommend to your mother, you know? And then the second thing is, you know, obviously in the future these, and even then you don't necessarily want to recommend a third party. If there's an application that's open source that will back it up for them and do everything the right way, like the ones that you guys are working on now, that's what you'll recommend, of course. You won't recommend a third party. Even then I wouldn't, especially then I wouldn't recommend an e-wallet, you know. But there is a place for e-wallets, not to say that there isn't a place for e-wallets, there is a place for some pocket change that you want to go out to a restaurant or whatever and just for convenience sake, you know, there is, you know. I ran into this, a little story, I ran into this in Tokyo because we went to tape at this Japanese nightclub that has agreed to accept Bitcoin and you'll see it on future episodes, all the footage of that is really fun. And, but anyway, they've agreed, there are actually four nightclubs that agreed to accept Bitcoin. So we shot the whole thing of us setting them up to accept Bitcoin, which is kind of hysterical. But anyway, in advance, Roger said, you know, let's use, he wanted to use Insta Wallet. And I'm like, oh no, no, no, I don't like that. I don't like recommending Insta Wallet because there's no login and password. It just makes me really nervous that a URL is, people don't understand, especially a novice user doesn't understand that a URL is your password, what? You know, it's just, to me, that's, that really, something bothers me about that. And so I said, you know, just use, you know, whatever, can't use Mt. Gox because he's got a Yubiqui, whatever, whatever, different things. So I was like, well, try, you know, VBanko. And so we set up a VBanko. It's really super, super simple. But I mean, it's so simple. It doesn't even have a transaction history log. I mean, it's almost like Insta Wallet with a password. So we're like, okay, we tried that. Well, apparently there was some kind of a glitch. They say it was a bug in Bitcoin D or something like that, that they account, we sent 100 Bitcoins to it and it didn't get posted for like 15 hours, it was still not posted and they had to actually go in and manually post it. So there's some kind of a bug. But that's the problem, you know, you've got issues. And he's like, see, we should have stayed stuck with Insta Wallet, you know, with the green addresses and stuff, ah, what are you going to do? There's always something. But I think there's- Insta Wallet is something I want to address directly because I believe it's currently featured on WeU's coins. So, you know, obviously it's not something where you want to keep huge amounts for sure, like definitely, but it is the most convenient thing right now. And I had a lot of correspondence with the operator and, you know, he's a nice guy and he's used his real name. So, you know, it's a step up from my Bitcoin for sure. But there's still the slingering fear, obviously. And, you know, people might watch this video in the future after Insta Wallet has been hacked or something, so, you know, it's going to be really funny. But, you know, it's the only service that I can see that I want to at all recommend because, as you say, you need to recommend something. You can't just say there's nothing right now. Yeah, I know. And it's not that I don't trust the guy or the service or the technology. It's just the principle of not having a password just really bothers me. Right. But yeah, so there will be a place for eWallets, but I think the ultimate thing is what you guys are working on, these new clients that just secure you from beginning to end. Because you're talking about, like, we're not just talking about a browser cookie. We're talking about money here, you know? And it's like, any amount of money is important. It has value. And, you know, we have to be good stewards of our money. And now, I'm sorry, I hate it, but I have to cut us off because we're out of time. We've literally got, like, 60 seconds left. So we have to do this again, you know? When Gavin gets the last word, I would say. OK, don't give you guys the last word. Go ahead. Well, I have nothing to say. I have nothing more to say. How about you, Gavin? I guess my last word would be, if you do use an online wallet service, don't put any money there that you can't afford to lose. Yeah, right. That would be my last word. Amen. Hallelujah. That's right. What about you, you got a last word? Um, well, I'm just waiting for, like, you know, because right now, most of the service that came out, it's more like business related. It's all trying to monetize everything. And I think the open source is just, you know, a step behind. And when they get here and a lot more things that has just simply good will, like, you know, here's Bitcoin.js that just want to do open stuff. Yeah. And I think those are coming. And brighter days are to come. And I think second generation will be here soon. OK, thanks. That's it. We're out of time. But join us again tomorrow. And every Thursday, we're going to do this community panel discussion. And it's fun. It's so cool. Always something to talk about. But thanks for joining us on the Bitcoin Show. See you tomorrow.